Our long-term goal is to understand how the hematopoietic system is established in the developing embryo. This grant application focuses on the investigation of inductive signals and downstream molecules that control hematopoietic development. By utilizing the in vitro differentiation model of embryonic stem (ES) cells, we identified that bone morphogenetic protein (BMP), Wnt and Notch signals play an integral role in Flk-1+ mesoderm formation and differentiation. Expression of Er71, an Ets transcription factor, was greatly down regulated by BMP, Notch and Wnt inhibition. Enforced ER71 expression in ES cells resulted in a robust induction of FLK1+ mesoderm, rescued generation of FLK1+ mesoderm when blocked by BMP, Notch and Wnt inhibition, and enhanced hematopoietic and endothelial cell generation. Moreover, mice deficient in Er71 failed to express Flk1, died in early gestation and displayed severe blood and vessel defects that are highly reminiscent of the Flk1 null mouse phenotype. Based on these preliminary findings, we hypothesize that combined BMP, Wnt, and Notch signals are critical for the establishment of the Flk-1+ mesoderm, hemangioblast and hematopoietic development and that ER71 is a downstream effector that integrates these upstream signals and regulates the formation of Flk-1+ mesoderm, hemangioblast and hematopoietic development. Aim 1 is to test a hypothesis that ER71 is critical for the genesis of hemangioblast and hematopoietic system. We will generate and characterize chimeric mice between ER71-/- ES cells and wild type embryos. We will also generate and characterize conditional ER71 knockout mice. Aim 2 is to test a hypothesis that a network of ER71 and its target genes regulates Flk-1+ mesoderm, hemangioblast and hematopoietic development. In vitro differentiation of ES cells, chromatin immunoprecipitation (ChIP), ChIP-chip and ChIP-sequencing will be utilized to identify and characterize ER71 target genes. Aim 3 is to test a hypothesis that BMP signaling genetically interacts with Wnt and/or Notch in regulating hematopoietic development. Compound, conditional Smad4, nicastrin, and 2-catenin mice will be analyzed for blood phenotype. We believe that the proposed studies are pertinent to fundamental issues of developmental hematopoiesis and that the outcome of the studies will advance our understanding of the molecular pathways regulating hematopoietic development. The knowledge gained from these studies is directly relevant for the utmost important goal of generating hematopoietic stem cells from ES cells and clinical interventions involved in hematologic disorders. PUBLIC HEALTH RELEVANCE: This grant proposal is to define signals that regulate blood formation. Specifically, we will investigate BMP, Wnt and Notch requirements in blood development. We will also test a hypothesis that ER71, an Ets transcription factor, integrates BMP, Wnt and Notch signaling and regulates blood formation. The outcome will be critical for future regenerative medicine utilizing embryonic stem cells and interventions concerning hematologic disorders.